Genesee & Wyoming’s carloads
The top line for rail freight companies depends on their volume growth and pricing ability. Genesee & Wyoming (GWR) is a non-Class I US railroad (IYJ). It’s the largest short line US carrier in the United States and Canada with operations also in the United Kingdom, Europe, and parts of Australia.
GWR has grown inorganically through multiple acquisitions of small railroads in the last few years. However, for the past few months, its freight volumes YoY (year-over-year) have shown a declining trend. Investors will most likely pay special attention to GWR’s same-railroad volume growth in the coming quarters.
Major railroads: Volume trend in 1Q18
As you can see in the above chart, only GWR’s and CSX’s (CSX) YoY railcar traffic declined in 1Q18. On April 17, CSX announced its first quarter 2018 results. Its revenue was flat compared to 1Q17. It was able to maintain its revenue banking on pricing gains despite a 3.7% fall in volumes.
The only railroad that posted strong volume growth in 1Q18 was Berkshire Hathaway, which is owned by BNSF Railway (BRK.B). Its volumes rose 4.7%. Canadian Pacific Railway (CP) followed BNSF with a 3.9% rise in 1Q18 railcar traffic. It announced its earnings on April 18. Its revenue growth was 4% that quarter, which was almost on par with freight volume gains. Other railroads haven’t announced their 1Q18 earnings yet. Let’s take a look at 1Q18 railcar traffic changes for GWR’s peer group.
- Norfolk Southern (NSC): rose 2.6%
- Union Pacific (UNP): rose 1%
- Canadian National Railway (CP): rose 2.8%
- Kansas City Southern (KSU): rose 0.9%
KSU announced its first quarter 2018 earnings on April 20. Its revenue rose 5%, driven by a ~1% rise in carloads.
In this series
In this carloads series for GWR, we’ll assess the company’s regional freight volumes in March.